JOHN LEWIS PARTNERSHIP GSB CONSULTING

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1 JOHN LEWIS PARTNERSHIP GSB CONSULTING

2 JOHN LEWIS PARTNERSHIP Purpose Power Profit Partners Customers Business BREXIT Relationships 2014: : (13.1%) 2016: (2%) 2017: 9% BREXIT Community Return to Profitability despite Uncertainty

3 MANDATE Integrated Strategy to best position the business for the uncertainty of BREXIT by introducing new suppliers, incorporating technology in service delivery and a staff reskilling program leading to a 6% CAGR for Profit and maintaining JLP s position as UK s largest multichannel retailer

4 KEY ISSUES 1 Brexit impact on operational costs 2 Waitrose is in a competitive groceries market 3 Technology causing workforce redundancy

5 RECOMMENDATIONS 1 Sourcing Textiles in Africa 2 Wanda 3 Centre for Job Redesign

6 ANALYSIS SIAN

7 ASSUMPTIONS 1 10% Of workforces are partners from inside EU countries 2 Regardless of Brexit, product prices from EU will continue to increase

8 IMPACT OF BREXIT ON OPERATIONS Staff: 86,700 Lower wage support warehouse, maintenance lower wage support 40% Partners from Eastern EU countries products sourced from inside EU Foreign exchange rate impact Need to review staffing requirements and sourcing products while maintaining Principles

9 WAITROSE COMPETITIVE ANALYSIS High price M&S Waitrose Sainsbury s Waitrose 5.3% market share M&S and Sainsbury s offer similar Low quality Tesco High quality Waitrose competitive advantage supplier relationship Tesco s competitive advantage online Low price Needs to differentiate itself from competitors to ensure consistent and sustainable profits

10 TRENDS IN RETAIL Core competencies: Customer service Quality Pioneer Strong staff culture Steady brand Online presence Trends in retail: Online shopping Smart phone scanning Self-checkout 4 th Industrial revolution Impact mainly on how work is done Need to job design to reduce impact on partners

11 KEY ISSUES 1 Brexit impact on operational costs 2 Waitrose is in a competitive groceries market 3 Technology causing workforce redundancy

12 RECOMMENDATIONS BONGANI

13 ALTERNATIVES Alternatives Advantage Disadvantage Cost Management Acquire Acquire businesses businesses outside outside Hedging Hedging EU EU Costly Costly of of EU EU assets assets The The Waitrose Waitrose Meal Meal kit kit Added Added meal meal Novelty Novelty Trend Trend convenience convenience Shift Shift to to Key Key Timer Timer model model Company Company Fulltime Fulltime competency competency preferred preferred Sourcing Sourcing textiles textiles in in Africa Africa Less Less dependence dependence New New on on EU EU relationships relationships Wanda Wanda Machine Machine learning learning New New Cost Cost Maximising Staff input Profitability Centre Centre for for Job Job redesign redesign Results Results in in the the least least loss loss of of staff. staff. Costly Costly

14 SOURCING TEXTILES IN AFRICA Company has relationships in Africa East Africa now cost competitive in Textiles Geographically feasible as compared to Asia KPI: 9% Operating Profit by 2022

15 WANDA Relationships with supplier consultants Supplier consultants skilled in technology Company has customer knowledge KPI: 3% CAGR by 2022

16 CENTRE FOR JOB REDESIGN Aligned with Principles of the company Maintains staff morale Maintains quality of service KPI: Positioning for consequences of Technology

17 IMPLEMENTATION CAROLINE

18 SOURCING TEXTILES IN AFRICA Establish supplier hub in Kenya Export Processing Zones Government subsidized lands Staffing support Subsidized raw materials imports Supplier support Supplier support Operations management training Operations consulting Aim for deliveries once monthly Develop lower cost suppliers for John Lewis clothing and home

19 TIMELINE Jan April 2018 Selection and contractual process May October 2018 Supplier build-up November 2018: Production begins January 2019: First delivery Cost: $44 mn KPI: Increase OP as % Revenue to 9% by 2022

20 WANDA Build an App that uses data to automatically creates a shopping list Track purchases through in App loyalty card Track brands, frequency and locations Add items to virtual shopping list Machine learning increases accuracy Personalised push notifications for specials Alternatives suggestions data uses comparable customers Collect at my store Order online now

21 TIMELINE Jan - April 2018 Requirement gathering May Nov 2018 Development Dec Feb 2019 Data gathering goes live March April 2019 Beta testing AI May 2019 Public Launch Cost: $24.9 mn KPI: Drive Waitrose revenue growth to 3% CAGR by 2022

22 CENTER FOR JOB RE-DESIGN Appoint a new Training Team Conduct a detailed skills audit Establish training programme Re-deploy / Re-skill Train the trainer Consult Partnership Council on plans Options: Re-deploy to new work area/division Retrenchment Full time > Key Time Announce 5-year plan to employees Key messages: Technology will change the way we work We are unsure of how Brexit will affect our partners Plan to position the company to deal with this Invite comment

23 TIMELINE Jan - April 2018 Appoint new team May July 2018 Skills Audit July Sept 2018 Design training programmes October 2018 Begin re-skill Training - Waitrose Cost: $10mn KPI: Position company for tech and Brexit changes

24 FINANCIALS TARRYN

25 GRAND TOTAL IMPLEMENTATION BUDGET Recommendation Tactic KPI Business Development and Contracts 1.2 Increase John Supply Support / Training Lewis OP as % Sourcing Textiles in Africa Setup Costs Revenue to 9% by Consulting Wanda Centre for Job Re-Design Sub-Total Development 2.4 Drive Waitrose Marketing revenue growth Ongoing Management to 3% CAGR by Analytics Team Sub-Total Training Team Position company Skills Audit 0.8 for tech and Brexit Train the Trainer Program changes Sub-Total

26 FORECASTING , ,000 10,500 10,000 9,500 9,000 Operational Profit Profit before Partnerships Revenue ,500 Forecast ( m) HISTORIC CAGR CAGR Revenue 1.1% 9,701 9,671 10,026 10,202 10,414 10,675 10,962 11, % Waitrose 0.6% 6,135 6,009 6,246 6,308 6,403 6,543 6,707 6, % John Lewis 2.0% 3,566 3,663 3,781 3,894 4,011 4,131 4,255 4, % Operational Profit 0.6% % Waitrose 2.2% % John Lewis -1.0% % Profit before Partnerships 2.6% %

27 RISK MANAGEMENT Risk Impact Contingency Plan 1 Uncertainty around Brexit deadline Robust readiness plan 2 Worker acceptance of the Job-Centre initiative Ongoing engagement with partnership council 3 Allowance for entry into Kenyan market 4 Wanda adoption Engage with an alternative Eastern African country (i.e. Ethiopia) Allocate additional staff and capital for improved data analytics

28 CONCLUSION BONGANI

29 THE VISION 6% CAGR #1 UK MC retailer Mandate Recs Africa Wanda Job redesign Costs managed Differentiated Outlook

30 APPENDIX Op Profit as % of Revenue Waitrose 3.9% 3.9% 4.1% 4.00% 4.00% 4.20% 4.20% 4.50% John Lewis 7.0% 6.8% 6.4% 6.76% 7.50% 7.80% 8.00% 9.00% Growth Revenue -0.3% 3.7% 1.8% 2.1% 2.5% 2.7% 3.3% Waitrose -2.1% 3.9% 1.00% 1.50% 2.20% 2.50% 3.50% John Lewis 2.7% 3.2% 3.00% 3.00% 3.00% 3.00% 3.00% Operational Profit -1.0% 2.9% 3.8% 8.0% 7.2% 4.2% 13.6% Waitrose -2.0% 9.0% -0.5% 1.5% 7.3% 2.5% 10.9% John Lewis -0.1% -2.8% 8.3% 14.2% 7.1% 5.6% 15.9% Profit -10.9% 21.2% -2.5% 8.0% 7.2% 4.2% 13.6%

JOHN LEWIS PARTNERSHIP PUTRA BUSINESS SCHOOL MALAYSIA

JOHN LEWIS PARTNERSHIP PUTRA BUSINESS SCHOOL MALAYSIA Background What : JLP runs UK s largest multi retailer When : Established in 98 Who : John Spedan Lewis (Found) Where : 8 stores presence Key issues